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“Government Motors” on Fire

An excerpt from Jason Vine's tell-all, “What Did Jesus Drive”

by on Dec.01, 2014

Vines holds few punches as he looks at how automakers like Ford and GM have handled big crises.

Jason Vines has served as head of public relations for both Ford and Nissan, and as part of the senior PR team at Chrysler. He’s also functioned as an outside consultant to several other major automakers, including General Motors – giving Vines an unprecedented insider’s view of some of the biggest crises to shake the industry over the last two decades.

That includes the Ford/Firestone exploding tire disaster blamed for 271 deaths, as well as the ongoing General Motors ignition switch debacle. In this excerpt from Vines’ new book, “What Did Jesus Drive,” he offers a devastating, inside look at GM’s attempt to handle that scandal.

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Two weeks before GM’s first Congressional hearing regarding the ignition switch debacle, Selim (ed: former GM PR chief Selim Bingol) was on the phone. “Any advice,” he said. “You’ve been through this shit.”

Up to now, GM had been vigorously putting out CEO Mary Barra in every form of communications thinkable, apologizing profusely for the past transgressions of the “Old GM” and the humanity of the “New” post-bankruptcy GM, including a hideous video in which Barra looked like she was a prisoner at the Hanoi Hilton in ‘Nam.


US Treasury Sells off Final Shares of GM

“Government Motors” is now a completely private enterprise.

by on Dec.09, 2013

The Treasury exits GM more than four years after the maker's 2009 bankruptcy.

Call it “Government Motors” no more.  More than four years after it emerged from bankruptcy with the help of a $49.5 billion federal bailout that left American taxpayers holding the majority of the company the U.S. Treasury has sold off its final holdings in General Motors.

Wall Street traders have been reacting strongly to news that the White House was set to get out of the auto business, GM shares setting surging during Monday trading after last week topping the $40 mark since the maker’s November 2011 IPO.  Among other things, the maker will now be in a position to pay dividends on its common stock and to raise the pay of senior managers without first getting approval from the administration’s pay czar – limits enacted as part of the terms of GM’s bailout.

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“The U.S. Treasury’s ownership exit closes just one chapter in GM’s ongoing turnaround story,” said GM Chairman and CEO Dan Akerson.  “We will always be grateful for the second chance extended to us and we are doing our best to make the most of it. Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.


GM Stock Closes at All-Time High

Taxpayer loss on “Government Motors” bailout likely to dip slightly.

by on Dec.03, 2013

GM stock reaches a towering level - but can it hold?

Investors will be watching closely today to see if General Motors can maintain momentum after its stock closed at an all-time high on the first day of December trading – and just weeks before the federal government plans to sell off the last of the shares taken in return for GM’s $50 billion bailout in 2009.

GM stock closed Monday at $39.11, the highest figure since the “new” General Motors was formed in 2009 following the maker’s emergence from Chapter 11 protection.  Shares briefly climbed as high as $39.39 during the day.  The maker’s previous closing record was $38.98 on January 7, 2011.

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GM shares subsequently took a sharp tumble, dipping down into the mid-teens during the summer of 2011. Its 52-week low, meanwhile, was $24.40.  The automaker’s stock has been rebounding this year at a rate notably faster than the overall turnaround of the Dow Jones Industrial Average – which has itself been in record territory in recent weeks, nudging up as high as $16,174.51.


Treasury Will Sell Remaining GM Shares by End of Year

Government expected to lose more than $10 billion on bailout.

by on Nov.21, 2013

General Motors is about to be completely government-free after the U.S. Treasury announced plans today to sell its remaining 31.1 million shares by Dec. 31.

The U.S. Treasury is fast-tracking its plans to sell off its remaining shares of General Motors to be completely divested by the end of this year. The government currently has 31.1 million shares remaining after recently selling 70.2 million shares for $2.56 billion, the Treasury Department said.

“If average daily trading volumes continue at recent levels, Treasury anticipates that it will complete the sale of its remaining shares by the end of the year. However, that schedule remains subject to market conditions,” the Treasury said in a statement.

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The government is likely to lose more than $10 billion. Treasury has already booked a loss of $9.7 billion on the sale of about 800 million shares of its stake. (more…)

U.S. Treasury Continues Sale of GM Stock in October

Government still tracking to lose nearly $10 billion.

by on Nov.13, 2013

The U.S. government now holds about a 4% stake in General Motors after selling off more stock in October.

The U.S. government’s steady sale of its remaining shares of General Motors stock continued last month, according to the Treasury Department, as it sold $1.2 billion of its holdings.

The government is still on track to lose about $9.7 billion on the shares, which it acquired in 2009 as part of the automaker’s bankruptcy restructuring. The final number won’t be known until all of the shares are sold, but the Detroit-based maker’s stock price would have to jump to more than $175 per share now for the government to break even.

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The Treasury has said it plans to divest the rest of its holdings by next spring and has been selling the stock in bits and pieces since this summer. (more…)

GM’s Eroding Market Share Raises Concerns

Strong reviews do little to buoy GM’s position.

by on Nov.04, 2013

Even strong 3rd-party endorsements for products like the Cadillac ATS have failed to boost GM's share.

Despite winning wide praise for its improving quality and well-reviewed new products, General Motors has been steadily losing market share, and that is raising concerns about the maker’s competitiveness, according to a new report from the General Accounting Office, which continues to monitor the U.S. Treasury Department’s investment in the Detroit maker following its 2009 bankruptcy.

The Treasury took a majority stake in GM but has been rapidly selling down its shares in recent months and expects to sell off the last of its holdings by next April – with the latest government report estimating taxpayers will ultimately lose about $9.7 billion on the bailout.

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On the positive side, the GAO report said the globe’s second-largest maker “has shown increasingly positive financial results” since its emergence from Chapter 11 protection, with “positive and growing operational cash flow, and a stable liquidity position.”  On the downside, “However, GM faces continued challenges to its competitiveness. For instance, its market share of vehicles sold in North America remains smaller today than in 2008. Furthermore, GM continues to carry large pension liabilities,” the report noted.


Government Motors No More! Almost

Treasury Department sells off most its remaining shares of General Motors.

by on Oct.29, 2013

The government is in the final phase of getting the Government out of Government Motors.

Government Motors is basically no more, and the final price tag for taxpayers to bailout the automaker is about $9.7 billion.

The U.S. Department of Treasury now owns just 7.3% of the General Motors’ common stock after its most recent stock sell off.

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Taxpayers originally held 60.8% of GM in exchange for the bailout loans. Treasury has been selling down that stake, but ramped up its efforts this year. (more…)

GM Struggles to Change Perceptions

Getting out from under the shadow of “Government Motors.”

by on Oct.11, 2013

The Chevrolet Sonic has made quite a splash since its debut for 2012.

The quality of General Motors vehicles is getting better but consumers still tend to believe cars from Toyota and Honda are more reliable, according to independent research. And that’s a serious problem the Detroit maker is struggling to overcome, particularly along the East and West Coasts where GM lags well behind its import rivals.

The irony is that General Motors products have actually bested Toyota in a number of recent surveys, including the closely followed J.D. Power Initial Quality Survey. GM was the top maker in the 2013 IQS while Chevrolet landed in the Top Five, a rarified group normally limited to luxury brands. Meanwhile, the maker’s Chevy Sonic subcompact topped its segment for the second year running in Power’s APEAL, or Automotive Performance, Execution and Layout survey.

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That prompted a celebration at GM’s Orion Assembly plant in suburban Detroit this week, where Roman Lesnau, of J.D. Power Associates told employees that their work has been a critical part of improving the maker’s quality and customer satisfaction scores.


GM CEO Akerson Delivers Upbeat Assessment on Capitol Hill

“We’re fine,” he tells lawmakers as Treasury speeds up sell-off of GM stock.

by on Mar.21, 2013

GM CEO Dan Akerson.

General Motors is doing just “fine,” the maker’s chairman and CEO declared during a well-attended session with federal lawmakers at the Capitol Hill Club in Washington, today.

While it might have been a bit like asking a student to pencil in their own grade, Chief Executive Officer Dan Akerson provided dozens of members of Congress what he billed as a report card of the company nearly four years after it emerged from bankruptcy as part of an $85 billion bailout of the nation’s auto industry.

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Asked whether there was anything GM still needs from the government, Akerson answered, “No, we’re fine,” pointing to the profits GM has delivered since its run through Chapter 11, its stream of new products and the thousands of new jobs it has been adding.


Feds Rapidly Selling Off GM Shares

“Government Motors” no more?

by on Mar.12, 2013

GM Chairman and CEO Dan Akerson has made it clear he wants the government to sell off its stock ASAP.

It may soon be “Government Motors” no more.

While the White House has set a deadline of April 2014 to sell off all its remaining shares of General Motors, it appears to be racing to meet that target sooner than expected, the Treasury selling off nearly $490 million in stock last month, according to a report provided to Congress.

But at the price taxpayers received – anywhere from $26.19 to $29.36 per share – that could mean an eventual loss on the 2008 – 2009 GM bailout of billions of dollars.

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At one point, the U.S. Treasury held a majority stake in GM, prompting critics of the bailout to deride the maker as “Government Motors.” Some right-wing pundits went so far as to call for a boycott of GM products, along with those from Chrysler, which also received federal assistance.